1. The City Street Corporation's common stock has a beta of 1.2. The risk-free rate is 3.5 percent and the expected return on the market is 13 percent. What is the firm's cost of equity? *please show work*
a. 11.4
b. 12.8
c. 14.9
d. 17.6
e. 19.1
2. The outstanding bonds of Tech Express are priced at $989 and mature in 8 years. These bonds have a 6 percent coupon and pay interest annually. The firm's tax rate is 39 percent. What is the firm's after-tax cost of debt?
A 3.01 percent
B 3.22 percent
C 3.35 percent
D 3.77 percent
E 4.41 percent
3. Holdup Bank has an issue of preferred stock with a $5 stated dividend that just sold for $92 per share. What is the bank's cost of preferred?
A 4.60 percent
B 4.64 percent
C 5.39 percent
D 5.43 percent
E 5.54 percent